When it comes to market sectors, last year’s losers are this year’s winners.

The S&P 500’s best performers are Technology (XLK), Communication Services (XLC), and Consumer Discretionary (XLY), up about 32%, 32% and 22%, respectively, so far this year. It’s worth noting those three sectors were the worst performers of 2022 as the Federal Reserve hiked interest rates and investors worried about a looming recession.

Investors who stuck with last year's laggards, have seen their luck change in 2023.

Even the badly beaten Homebuilders ETF (XHB) is up 24% year-to-date. The exchange traded fund which includes names like Lennar (LEN) and Toll Brothers (TOL) was down almost 29% in 2022 amid rising mortgage rates.

In contrast, energy stocks, the superstars of 2022, have lost their luster this year. Energy Select (XLE), is down more than 6% YTD. Keep in mind, the sector gained a whopping 64% in 2022.

"Energy is negatively correlated with tech as investors tend to use energy stocks as a source of funds to invest in tech," Jay Hatfield, CEO of Infrastructure Capital Management, told Yahoo Finance.

That trend has also been accentuated amid demand concerns for oil given China's weaker-than-expected recovery once Covid lockdowns were lifted.

Much of the tech-fueled rally this year comes amid an expectation of a Fed rate pause by mid-year, low unemployment and a frenzy over generative artificial intelligence.

The banking crisis in March caused a steep sell-off in financials and other...

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